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Sallie Mae Private Student Loans at a Glance

Piggy Bank & Student Debt
HIGHLIGHTS
  • Sallie Mae offers 8 private student loans.
  • Apply for deferment or forbearance if you cannot afford your payments.
  • Consider a student loan consolidation.

Learn if Sallie Mae's 8 Private Student Loan Types Are Right For You, Plus How to Ask For Deferment & Forbearance.

SLM Corp., also known as Sallie Mae, was the US’s largest originator of federal student loans until 2010 when the Dept. of Education started originating federal student loans itself. Sallie Mae now services federal student loans on behalf of the Dept. of Education, and originates private student loans. Sallie Mae employs 8,000 people, and manages more than $180 billion in debt for more than 10 million student loan borrowers. The company was originally created in 1972 as a government-sponsored enterprise (GSE) and privatized its operations in 2004. Sallie Mae also originates and services private student loans.

As this was written in late 2011, Sallie Mae offers eight private student loans:

Loan Name Intended Borrower & Purpose Amount Available Fees Rate & Term
Source: Sallie Mae, December 2011.
Smart Option Student Loan Must attend degree-granting eligible school and be enrolled in eligible program.1 Up to 100% of school-certified education costs. None 10 years. LIBOR + 2.00% (2.25% APR) to LIBOR + 9.88% (9.37% APR)1
Career Training Smart Option Student Loan Non-degree-granting institution with a planned term for enrollment of approximately one academic year. Up to 100% of school-certified education costs. Up to 5% 9 years. LIBOR + 7.75% (APR 8.00%) to LIBOR + 12.50% (13.76% APR)
Medical Residency & Relocation Loan Enrolled in final year of study at an allopathic or osteopathic school of medicine and expect to be awarded M.D. or D.O. degree during the same academic year of application. $1,000 up to $15,000 None LIBOR + 3.00% (3.21% APR) to LIBOR + 11.88% (11.57% APR)
Dental Residency & Relocation Loan Expect to be awarded D.D.S. degree during the same academic year of application. $1,000 up to $15,000 None LIBOR + 3.00% (3.21% APR) to LIBOR + 11.88% (11.57% APR)
Global Health Residency & Relocation Loan Enrolled in final year of study at an allopathic or osteopathic school of medicine and expect to be awarded M.D. or D.O. degree during the same academic year of application. $1,000 up to $15,000 None LIBOR + 3.00% (3.21% APR) to LIBOR + 11.88% (11.57% APR)
Bar Study Loan Enrolled in final year at an ABA-accredited law school, or graduated within last 12 months, and sitting for the bar exam no later than 12 months after graduation. $1,000 up to $15,000 0.00% or 5.00% 15 years. LIBOR + 5.00% (5.24% APR) to LIBOR + 13.00% (14.01% APR)
K-12 Family Education Loan Student enrolled of an eligible K-12 school. 100% the cost of a child's education. 0.00% or 3.00% 3 years. LIBOR + 7.00% (7.25% APR) to LIBOR + 11.50% (13.82% APR)
Tutorial Financing Loan Student enrolled at an eligible tutoring and learning center. Variable. 0.00% to 5.00% Variable term. LIBOR + 7.00% (7.25% APR) to LIBOR + 13.50% (APR 15.30%)
1Loans available at a higher rate for non-degree schools.

Sallie Mae and Student Loan Collections

If you cannot afford to repay your Sallie Mae student loan, you have options to avoid default (non-payment). Before reading any further, learn if your loan is federally insured (the US government is guaranteeing repayment of the loan), or private. If your loan is FFEL, Perkins, or Direct, it is federal. If the Sallie Mae loan is federally insured, Sallie Mae must follow federal rules for student loan collections. See the Bills.com resource Default on Federal Student Loan to learn more about your rights, options, and liabilities as the borrower of a federal student loan.

If you cannot afford your Sallie Mae student loan payments and your situation is temporary, login to your Sallie Mae account, select the Postpone Payments section, and request a deferment. Some Sallie Mae loans also allow forbearance. If your income is reduced, Sallie Mae will also negotiate a reduced monthly payment. The Sallie Mae Postponing payments page outlines these options.

If the Sallie Mae loan is private, then Sallie Mae will follow the borrower’s state laws and the rules in the loan contract the borrower signed. Private student loans are similar to unsecured debt. If the borrower defaults on a private student loan, the creditor or collection agency must sue in civil court to collect. If it wins a judgment, the creditor or collection agency can garnish wages, place a lien against property, or a levy financial accounts. The only thing that separates a private student loan from other unsecured debt, such as credit card debt, is that private student loans are not dischargeable in a bankruptcy filing, generally speaking.

Student Loan Consolidation

A student loan consolidation may help by increasing the term length, thereby lowering the monthly payment. There are basically two types of consolidation loans — unsecured and secured. To learn more about unsecured student loan consolidation, see the Bills.com Student Loan Consolidation page.

If you are a homeowner with equity in your home, a debt consolidation loan secured on your home may also be an option, though you should be careful before you borrow money against your home to pay off these Sallie Mae loans. You would be converting what was previously unsecured debt into secured debt. This could cause problems in the future if you are unable to make your mortgage payments. To explore this alternative, you can apply with Bills.com’s network of providers by applying at the Bills.com mortgage refinance form.

Comments (56)


Keith M.
Newark, DE  |  December 01, 2011
If you reside in Pennsylvania but earn wages in another state would the garnishment rules fall under the state you earned wages or the state (PA) you live in?
Bills.com
December 02, 2011
The garnishment would depend on the place where the court judgement was given. If the lawsuit was in Pennsylvania, then PA laws would govern the wage garnishment rules. If the court judgment was done in the place of work, then those laws would apply. The creditor can domesticate the lawsuit to another state. I suggest that you speak with an attorney, as only an attorney can properly dispense legal advice. Also, work with your creditors or seek debt relief, to avoid a wage garnishment.
Kathy M.
San Diego, CA  |  November 21, 2011
I recently filed for Chapter 13 due to my house being underwater and significant credit card debt incurred while in Grad school. I am in an 80/20 loan on my house and I am able to strip the 2nd loan and discharge my credit card debt. I will be left with 250k in school loan debt. I have every intention of continuing with the payments while in the chapter 13 as the interest is ridiculous. I have one large loan that I consolidated into the IBR plan and two private loans. Am i penalized for any payments made to my school loan debt while in the chapter 13? What if I pay off one of the smaller private loans while in the chapter 13, am I penalized for that?
Bills.com
November 22, 2011
Consult with your bankruptcy lawyer before you start paying-off debts. Debtors may not favor one creditor over others that are in the same class.
Cathleen A.
Haslett, MI  |  November 09, 2011
Thank you for the helpful information and yes if you wouldn't mind I would greatly appreciate a referal to a bankruptsy attorney that you recommend. Thank you!
Bills.com
November 09, 2011
See the Bills.com resource How to Find A Lawyer for my best advice on finding the right lawyer for your needs.
Cathleen A.
Haslett, MI  |  November 04, 2011
Hi Bill, I am trying to get on the right track but am finding it hard to know where to start. I have run into significant economic difficultly I owe money to everyone it seems. I am debating on filing for bankruptsy, however, I also have student loans that I will need to consolidate and soon. I don't know what I should do first....or at all! I need help! Please point me in the right direction....
Bills.com
November 04, 2011
See the Bills.com Debt Coach for a no-cost, no-nonsense analysis of your situation. Debt Coach explains the pros and cons of your options, and the costs for each.
Deb P.
Duncanville, TX  |  October 22, 2011
Interest rates are at record lows. The U.S. government guarantees student loans through SallieMae. If the U.S. truly does want to promote education; help those who have made the commitment and graduated from college. Allow us to consolidate our student loans at these record low interest rates.
Monica R.
Glendora, CA  |  October 13, 2011
I think we should have a campaign to NOT take loans from Sallie Mae, and help each other pay off one debt at a time.
Ki M.
September 28, 2011
I have over $150K in debt by Sallie Mae private loan and another lender. I have decided to take classes part time to get them off my back. Do you think there will be any laws coming in to help us with this debt? I realize that there is no bankruptcy that you can do to lower or delete them. So what can be done? Just try to survive paying them?
Bills.com
September 28, 2011
I doubt Congress will take any significant action soon regarding student loan debt. Call me cynical, but Congress is deadlocked on fundamental fiscal issues affecting everyone. People struggling with student loans are not, as yet, a vocal enough group to capture national attention. The next question becomes what do you want Congress to do with delinquent student loans?
Bill
December 15, 2010
Anne: Florida state law extends the FDCPA to original creditors as well as collection agents. This means that original creditors are subject to the FDCPA when dealing with Florida residents. Sallie Mae must follow the rules set forth in the FDCPA when attempting to collect on a Florida resident's delinquent account.
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